The U.S. dollar firmed up against most of its peers on Thursday on safe haven demand after hopes of a fiscal stimulus faded and the coronavirus cases surged across the world, forcing several countries to impose fresh lockdown measures.
Uncertainty about a new stimulus bill grew after Treasury Secretary Steven Mnuchin suggested on Wednesday that a new relief package is not likely to pass before next month’s elections.
Senate Majority Leader Mitch McConnell has also cast doubts on whether a bill can pass before the elections and recently announced plans to vote on a more limited relief package.
However, stocks rebounded well off their lows after Mnuchin told CNBC’s “Squawk Box” that he and President Donald Trump are committed to getting a stimulus deal done.
Mnuchin said he plans to talk to House Speaker Nancy Pelosi today and tell her that he won’t let the issue of testing, a key sticking points in talks, stand in the way.
“We’ll fundamentally agree with their testing language subject to some minor issues,” Mnuchin said. “This issue is being overblown.”
The dollar index rose to 93.90 and despite paring some gains subsequently, was still up firmly at 93.80, about 0.45% up from previous close.
Against the Euro,the dollar firmed up to $1.1708, rising 0.35%.
The Pound Sterling was weaker by over 0.8% with a unit of Sterling fetching $1.2902, compared to $1.3010 Wednesday evening.
The Yen was losing nearly 0.25% at 105.41 a dollar, easing from 105.16 a dollar.
Against the Aussie, the dollar was up nearly 1% with the USD-ASD pair trading at 0.7095, after closing at 0.7162 on Wednesday.
The Swiss franc was down marginally at 0.9144 a dollar, while the Loonie was down 0.6% at 1.3223 a dollar.
In economic news, data from the Labor Department showed that initial jobless claims climbed to 898,000, an increase of 53,000 from the previous week’s revised level of 845,000. Economists had expected jobless claims to edge down to 825,000 from the 840,000 originally reported for the previous week.
With the unexpected increase, jobless claims reached their highest level since topping 1 million in the week ended August 22nd.